Waste Connections
Annual Report 2019

Plain-text annual report

White Cliff Minerals Limited ABN 22 126 299 125 Annual report for the year ended 30 June 2019 White Cliff Minerals Limited ABN 22 126 299 125 Contents Corporate information Review of operations Directors’ report Auditor’s independence declaration Statement of comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to the financial statements Directors’ declaration Independent auditor’s report to the members ASX additional information 3 4 15 25 26 27 28 29 30 50 51 55 2 White Cliff Minerals Limited ABN 22 126 299 125 Corporate Information Directors Company secretary Dan Smith Nicholas Ong Ed Mead Jack Gardner Michael Langoulant Todd Hibberd Rodd Boland (Appointed 14 December 2018) (Appointed 14 December 2018) (Appointed 19 June 2019) (Appointed 26 October 2018; Resigned14 December 2018) (Resigned 29 November 2018) (Resigned 19 June 2019) (Resigned 23 December 2018) Nicholas Ong Ian Hobson Michael Langoulant (Appointed 17 December 2018) (Resigned 17 December 2018) (Resigned 29 November 2018) Registered office and principal place of business Level 8, 99 St Georges Terrace Perth, Western Australia 6000 Share registry Auditors Solicitors ASX code Telephone: Facsimile: Website: (08) 9486 4036 (08) 9486 4799 www.wcminerals.com.au Computershare Investor Services Pty Ltd Level 11, 172 St George’s Terrace Perth, Western Australia 6000 (08) 9323 2000 Telephone: HLB Mann Judd Chartered Accountants Level 4, 130 Stirling Street Perth, Western Australia 6000 Atkinson Corporate Lawyers Level 8, 99 St Georges Terrace Perth, WA 6000 White Cliff Minerals Limited is listed on the Australian Securities Exchange (Shares: WCN, Options: WCNOD, WCNOE) 3 White Cliff Minerals Limited ABN 22 126 299 125 Review of Operations Highlights • During the year, corporate restructure and rights issue completed • Maiden Nickel-Cobalt Inferred Mineral Resource defined at Coronation Dam, WA. 5.7 Mt at 1.0% nickel and 0.08%cobalt above a cut-off grade of 0.8% nickel • Maiden Nickel-Cobalt Inferred Mineral Resource defined at Ghan Well, WA. 1.3 Mt at 0.9% nickel and 0.07% cobalt above a cut-off grade of 0.8% nickel • New copper and gold zones identified 2-4 Km East of Aucu gold deposit • Gold Nuggets Recovered at Merolia Gold Project Corporate During the year, the Group completed a partially underwritten 2:1 renounceable rights issue and subsequently repaid all loans. The Company appointed Mr Nicholas Ong, Mr Daniel Smith and Mr Ed Mead as non-executive directors. Mr Nicholas Ong was also appointed as Company Secretary. The Company announced the resignations of Messer’s Gardner, Langoulant, Hibberd, and Boland. Exploration Summary White Cliff controls tenement packages in Western Australia’s Yilgarn Craton and a major gold-copper project in Central Asia. On 6 September 2019 the Company announced that it had executed a binding offer for the sale of the Company’s 90% interest in the Accu Copper-Gold project in Kyrgyzstan, to RTG Mining Inc for total consideration of US$2.65 million. Central Asia During the year, an extensive geochemical survey identified that the core and alteration halo of the Chanach copper porphyry system extended over an 8 kilometre long zone. The survey also identified anomalous gold, copper, arsenic and base metal results to the north and east of the Aucu gold deposit. Follow up mapping and sampling identified new gold and copper zones 2-4 kilometres east of the Aucu gold deposit. The Company undertook a bulk sampling program along a 450 metre section of the Chanach river alluvial terraces 1 kilometre downstream from the Aucu Gold deposit to assess the placer gold potential of the 16km long river system. Visible gold was detected in 62 samples out of the 65 samples collected. The samples have been submitted to the laboratory for analysis with results expected in mid-March. In January 2019, the Company engaged a KPMG Perth to undertake a review of the options for advancing the project, either through joint-ventures or divestment. Subsequent to the end of the financial year, the Company announced that it has executed a binding share sale and purchase agreement for the sale of the Company’s 90% interest in the Aucu Copper-Gold project to RTG Mining Inc (RTG) for total consideration of US$2.65 million. Western Australia In Western Australia the Company is exploring several projects with the primary focus on the Ghan Well and Coronation Dam cobalt and nickel projects (Map 1). For the Ghan Well nickel-cobalt deposit, the Company reported in accordance with the guidelines of the JORC Code, a cut-off grade of 0.8% nickel, with the project consisting of 1.3 million tonnes with an average grade of 0.9% nickel and 0.007% cobalt, containing 11,900 tonnes of nickel and 900 tonnes of cobalt. For the Coronation Dam nickel-cobalt deposit, the Company reported in accordance with the guidelines of JORC Code, a cut-off grade of 0.8% nickel, with a project consisting of 5.7 million tonnes grading 1.0% nickel and 0.08% cobalt, containing 56,700 tonnes of nickel and 4,300 tonnes of cobalt. 4 White Cliff Minerals Limited ABN 22 126 299 125 Map 1 White Cliff Minerals Limited exploration projects in Western Australia 5 White Cliff Minerals Limited ABN 22 126 299 125 Map 2 Aucu project location with regional geology with major gold deposits illustrated The Aucu Gold Project, Central Asia (90%)1 During the year, the Company received results from a mapping and rock sampling program that identified extensive new mineralisation (ASX release 11 January 2019). The Company also conducted a bulk sampling program to evaluate the potential of the alluvial river terraces to host a placer gold deposit (ASX release 14 March 2019). Mapping and rock sampling was conducted over a large area based on the results from the recent soil geochemistry sampling program (ASX release 9 December 2018). The mapping identified multiple new shear zones and assays of rock samples have identified significant gold and copper mineralisation with gold assays up to 6.7 g/t gold and copper assays up to 7.8% copper (ASX release 11 January 2019). The sampling confirms that the scale of the Aucu gold and copper system extends over at least 8 kilometres west to east and is still untested to the south. 6 White Cliff Minerals Limited ABN 22 126 299 125 Figure 1: Rock geochemistry (gold) highlights new mineralised zones identified east of the Aucu gold deposit and hints at additional mineralised porphyry intrusions. The copper and gold results are associated with both porphyry and the overlying sandstones. Mineralisation occurs as within shear zones in both lithologies and as a layer of thermally altered magnetite rich skarn that is sandwiched between the sandstone and porphyry. The highest copper and gold results are associated with chalcopyrite and copper oxides (malachite and azurite) usually within shear zones cutting through the sandstones and porphyries. Moderate copper grades (1-2% Cu) and lower gold grades (0.1-0.7 g/t Au) are associated with the magnetite rich skarn. Key results are summarised in Table 1. Table 1: Key copper and gold results Sample Easting Northing Gold (ppm) Copper (%) Zinc (ppm) CHPT18-14-02 CHPT18-15-06 CHPT18-15-08 CHPT18-15-09 CHPT18-15-10 CHPT18-16-01 CHPT18-17-01 CHPT18-17-02 CHPT18-17-06 CHPT18-17-07 CHT18E-01-06 CHT18E-02-12 CHPT18-01-01 CHPT18-03-03 701,575 4,624,578 700,715 4,624,831 700,546 4,642,777 700,539 4,624,783 700,413 4,625,002 700,724 4,625,437 701,556 4,625,426 701,605 4,625,435 701,794 4,625,534 701,636 4,625,507 699,591 4,625,098 699,606 4,625,088 696,076 4,626,666 699,606 4,625,091 6.70 2.11 1.86 2.99 1.63 0.13 1.54 1.13 1.03 0.54 0.09 0.46 2.18 0.38 0.02 1.21 5.47 0.21 0.01 1.54 1.44 1.83 1.80 1.89 1.48 3.04 0.14 7.82 42 150 8 26 9 6,551 264 734 162 884 217 740 8 188 7 White Cliff Minerals Limited ABN 22 126 299 125 Australian Nickel and Cobalt Projects (100%) The Company has a 100% interest in three nickel and cobalt projects in the north-eastern goldfields of Western Australia. Substantial work has been conducted during the year and is detailed in the following sections. All three projects are located close to multiple operating mines serviced by substantial existing infrastructure such as roads, telecommunications, power, gas and with access to a skilled workforce. They are all within trucking distance of Glencore’s Murrin Murrin nickel-cobalt processing plant and other proposed processing facilities that could potentially pose an option for monetising resources. Figure 2: Location and infrastructure map of the Coronation Dam, Ghan Well and Coglia Well cobalt projects. The area is serviced by rail, roads, towns, airports and Glencore’s nickel processing facility at Murrin Murrin Coronation Dam Nickel and Cobalt Project (100%) The project consists of one tenement (16km2) in the Wiluna-Norseman greenstone belt 90km south of the Murrin Murrin nickel-cobalt HPAL plant. The tenement contains an Inferred Mineral Resource of 5.7 million tonnes at 1% nickel and 0.08% cobalt containing 56,700 tonnes of nickel and 4,300 tonnes of cobalt (ASX release 25 March 2019). Mineralisation is open along strike within an extensive ultramafic unit that contains zones of cobalt mineralisation associated with nickel mineralisation. During the year, the Company reported a maiden Inferred Mineral Resource (ASX release 25 March 2019) for the Coronation Dam nickel-cobalt deposit. 8 White Cliff Minerals Limited ABN 22 126 299 125 Figure 3: Oblique view looking north-west of the Inferred Mineral Resource blocks (nickel-left, cobalt-right) above a nickel cut-off grade of 0.8% nickel. Vertical exaggeration is set to 4. The main zone of mineralisation extends over 1.4 km north-south and 750 metres east-west. The vertical thickness of mineralisation ranges from several metres to a maximum of 70 metres. Mineralisation starts at surface and dips shallowly to the west. The bulk of the higher-grade mineralisation is concentrated within the centre of the deposit (see figures 4 showing depth slices of the nickel mineralisation). The deposit has only been shallowly drilled in most areas and remains open along strike and at depth. Table 2 provides a breakdown of the resource estimate by material type. Table 3 provides a breakdown of the resource estimate reported above a range of cut-off grades. Table 2: Coronation Dam – Inferred Mineral Resource March 2019 reported above a cut-off grade of 0.8% nickel Resource category Material type Tonnes (Mt) Oxide Inferred Transitional Fresh Total 5.0 0.5 0.2 5.7 Grade Contained metal Ni (%) Co (%) Nickel (kt) Cobalt (kt) 1.0 0.9 1.0 1.0 0.08 0.06 0.02 0.08 50.8 4.3 1.5 56.7 4.0 0.3 0.02 4.3 Table 3: Coronation Dam – Inferred Mineral Resource March 2019 reported above a range of nickel cut-off grades (COG) Ni % COG Tonnes Grade Contained Metal Mt Ni (%) Co (%) Ni (kt) Cobalt (kt) 0.5 0.6 0.65 0.7 0.8 0.9 1.0 14.5 12.3 10.6 8.8 5.7 3.3 1.9 0.8 0.8 0.9 0.9 1.0 1.1 1.2 0.05 0.06 0.06 0.07 0.08 0.09 0.10 115.6 103.3 92.2 80.1 56.7 37.1 23.9 7.5 6.9 6.4 5.7 4.3 3.0 2.0 For example, reported above a cut-off grade of 0.65% nickel, the deposit contains an Inferred Mineral Resource of 10.6 million tonnes at an average grade of 0.9% nickel and 0.06% cobalt (containing 92.2 thousand tonnes of nickel and 6.4 thousand tonnes of cobalt). The drilling and subsequent resource modelling has identified a substantial Inferred Mineral Resource of both nickel and cobalt. The drilling and resource modelling have covered a 1.4 kilometre long section of the prospective ultramafic sequence which extends for 5.6 kilometres within the tenement. Immediately north of the Inferred Mineral Resource there are several historical drill holes with nickel and cobalt mineralisation greater than 0.8% nickel or 0.05% cobalt (figure 4). This area covers a 1.7 kilometre long section of the prospective sequence and is a priority exploration target. 9 White Cliff Minerals Limited ABN 22 126 299 125 Similarly, immediately south of the Inferred Mineral Resource, the prospective ultramafic unit extends for a kilometre with some historical drill holes containing some anomalous nickel and cobalt mineralisation greater than 1% nickel and 0.08% cobalt. There is also potential for additional mineralisation to the west of the existing Inferred Mineral Resource, particularly down-dip, along section from the existing intersections. Interestingly, a small portion of the Inferred Mineral Resource occurs in fresh rock and consists of 200,000 tonnes at 1.0% nickel and 0.02% cobalt. The implication is that this mineralisation may consist of either nickel sulphide mineralisation or garnierite veining and the Company is investigating the potential for the tenement to host nickel sulphide mineralisation. Figure 4: Location map of drilling and cobalt mineralisation at Coronation Dam located 90 km southeast of Glencore’s Murrin-Murrin processing facility in Western Australia. Coloured dots represent maximum down hole nickel (left) and cobalt (right) grades from historical drilling. WCN drill holes are not coloured by grade. 10 White Cliff Minerals Limited ABN 22 126 299 125 Ghan Well Nickel and Cobalt Project (100%) During the year, the Company reported a maiden Inferred Mineral Resource for the Ghan Well nickel-cobalt deposit (ASX Release 18 April 2019). The Mineral Resource is reported in accordance with the guidelines of the JORC Code. The nickel and cobalt Inferred Mineral Resource, reported above a cut-off grade of 0.8% nickel, consists of 1.3 million tonnes with an average grade of 0.9% nickel and 0.07% cobalt, containing 11,900 tonnes of nickel and 900 tonnes of cobalt (Table 4). Table 5 provides a breakdown of the resource estimate reported above a range of cut-off grades. Table 4: Ghan Well – Inferred Mineral Resource April 2019 reported above a cut-off grade of 0.8% nickel Resource category Material type Tonnes (Mt) Grade Contained metal Ni (%) Co (%) Nickel (kt) Cobalt (kt) Inferred Oxide Transitional Total 0.5 0.8 1.3 0.9 0.9 0.9 0.09 0.05 0.07 4.2 7.7 11.9 0.4 0.4 0.9 Table 5: Ghan Well – Inferred Mineral Resource April 2019 reported above a range of nickel cut-off grades (COG) Ni % COG 0.5 0.6 0.65 0.7 0.8 0.9 1.0 Tonnes Grade Contained Metal Mt 6.5 4.6 3.6 2.7 1.3 0.6 0.2 Ni (%) Co (%) Ni (kt) Cobalt (kt) 0.7 0.8 0.8 0.8 0.9 1.0 1.1 0.04 0.05 0.05 0.06 0.07 0.07 0.08 45.3 34.6 28.6 22.1 11.9 6.3 2.6 2.4 2.1 1.8 1.5 0.9 0.5 0.2 The main zone of mineralisation extends over 700 metres north-south and 850 metres east-west and occurs as clays (oxide) to saprolitic ultramafic overlying fresh ultramafic rock (Figure 5). The overall shape of the mineralisation is a flat-lying, undulating body, separated into two main zones in the south which coalesce into a single zone to the north. The mineralisation is of variable thickness ranging from 1-2 metres to 40 metres. 11 White Cliff Minerals Limited ABN 22 126 299 125 Figure 5: Outline of the Ghan Well Inferred nickel and cobalt resource above a cut-off grade of 0.8% nickel (red) and interpreted ultramafic unit (white high magnetic zones) based on second vertical derivative magnetic image. The deposit has only been shallowly drilled in most areas and the potential for nickel and cobalt mineralisation remains open along strike for 3 kilometres to the north and 6 kilometres to the south (Figure 6). Immediately south of the new Inferred Resource the ultramafic host rock becomes significantly wider (increasing in width from 750 metres to 1,650 metres) providing substantial scope to increase the resource with further drilling. The Company is examining options for adding value to the project which may include preliminary metallurgical test-work to establish metal recoveries and rock characteristics prior to further drilling. The proximity to processing infrastructure provides the potential for multiple development options if an Indicated Mineral Resource is defined. 12 White Cliff Minerals Limited ABN 22 126 299 125 Figure 6: Outline of the Ghan Well tenement (blue hatch) showing Inferred Resource (>0.8% Ni) in green and the extent of the host ultramafic unit (white, high magnetic zones). Coglia Nickel and Cobalt Project (100%) The project consists of two tenements (238km2) in the Merolia greenstone belt 50km south east of Laverton, Western Australia. The tenements contain extensive ultramafic units that host zones of cobalt mineralisation associated with nickel mineralisation. Previous drilling has identified extensive nickel and cobalt grades including 17 metres at 0.11% cobalt and 1.0% nickel (ASX release 18 June 2018). Annual Resource and Reserve Statement MINERAL RESOURCE SUMMARY AS AT 30 JUNE 2019 1. AuCu gold-copper project, Kyrgyzstan Gold Area Lower Gold Zone Upper Gold Zone Sandstone Zone Quartz Zone Quartz Zone Halo Camp Gold Zone Eastern Gold Zone Total Copper Gold (g/t) Gold (Ounces) Category Tonnes Inferred Inferred Inferred Inferred Inferred Inferred Inferred Inferred 1,160,000 4.0 4.7 770,000 11.4 280,000 6.2 330,000 1.9 190,000 8.8 110,000 120,000 2.8 2,950,000 5.1 148,000 116,000 102,000 65,000 11,000 30,000 11,000 484,000 Area Quartz Zone Chanach Porphyry Total Category Inferred Inferred Inferred Tonnes 700,000 16,500,000 17,500,000 Copper % Copper (tonnes) 0.51 0.36 0.37 4,000 60,000 64,000 13 White Cliff Minerals Limited ABN 22 126 299 125 2. Australian Cobalt and Nickel Projects Coronation Dam – Inferred Mineral Resource March 2019 reported above a cut-off grade of 0.8% nickel Resource category Material type Tonnes (Mt) Oxide Inferred Transitional Fresh Total 5.0 0.5 0.2 5.7 Grade Contained metal Ni (%) Co (%) Nickel (kt) Cobalt (kt) 1.0 0.9 1.0 1.0 0.08 0.06 0.02 0.08 50.8 4.3 1.5 56.7 4.0 0.3 0.02 4.3 Ghan Well – Inferred Mineral Resource April 2019 reported above a cut-off grade of 0.8% nickel Resource category Material type Tonnes (Mt) Grade Contained metal Ni (%) Co (%) Nickel (kt) Cobalt (kt) Inferred Oxide Transitional Total 0.5 0.8 1.3 0.9 0.9 0.9 0.09 0.05 0.07 4.2 7.7 11.9 0.4 0.4 0.9 Governance Arrangements and Internal Controls The Company has ensured that the mineral resource estimates quoted above are subject to governance arrangements and internal controls. A summary of these are outlined below. The mineral resources at each of the AuCu, Coronation Dam and Ghan Well projects are reported in accordance with JORC 2012. Audit of the estimation of mineral resources is addressed as part of the annual internal audit plan approved by the Board in its capacity as the Audit and Risk Committee. In addition to routine internal audit, the Board monitors the mineral resource status and approves the final outcome. The annual mineral resource update is a prescribed activity within the annual corporate planning calendar that includes a schedule of regular executive engagement meetings to approve assumptions and guide the overall process. The mineral resource estimation processes followed internally are well established and are subject to systematic internal and external peer review. Independent technical reviews and audits are undertaken on an as-needs basis as a product of risk assessment. Competent Persons Statement The Information in this report that relates to exploration results, mineral resources or ore reserves is based on information compiled by Mr Edward Mead, who is a member of the Australian Institute of Mining and Metallurgy. Mr Mead is a full time employee of the company. Mr Mead has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the `Australian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves (the JORC Code)`. Mr Mead consents to the inclusion of this information in the form and context in which it appears in this report. 14 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ Report Your directors present their annual financial report on the consolidated entity (referred to hereafter as the “Company”) consisting of White Cliff Minerals Limited (the “Company” or “parent entity”) and the entities it controlled during the financial year ended 30 June 2019. In order to comply with the provisions of the Corporations Act, the directors report as follows: Directors The following persons were directors of the Company during the financial year and up to the date of this report: D Smith – Non-Executive Chairman (appointed 14 December 2018) N Ong – Non-Executive Director (appointed 14 December 2018) E Mead - Non-Executive Director (appointed 19 June 2019) M Langoulant – (resigned 29 November 2018) T Hibberd - (resigned 19 June 2019) R Boland - (resigned 23 December 2018) J Gardner - (appointed 26 October 2018; resigned 14 December 2018) Principal activities The principal activity of the Group during the financial year was mineral exploration. Dividends No dividend has been paid or declared since the start of the financial year and the directors do not recommend the payment of a dividend in respect of the financial year. Review of operations Information on the operations of the Group is set out in the Review of Operations report on pages 4 to 13 of this Annual Report. Significant changes in the state of affairs There have been no significant changes in the state of affairs of the Group during the financial year and up to the date of this report other than the share consolidation referred to in Note 12 below and the rights issues and placement during the year. Matters subsequent to the end of the financial year There has not been any matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial periods other than: • On 6 September 2019, the Group announced that it had executed a binding offer for the sale of the Group’s 90% interest in the Aucu Gold-Copper project in Kyrgyzstan, to RTG Mining Inc for US$2.65 million, consisting of US$2.15 million cash and US$500K of RTG shares (“RTG”). • On 11 September 2019, the Group despatched a notice of extraordinary general meeting to shareholders to approve the sale. Likely developments and expected results Additional comments on expected results of certain operations of the Group are included in the Review of Operations. Environmental legislation The Group is subject to significant environmental legal regulations in respect to its exploration and evaluation activities. There have been no known breaches of these regulations and principles. Indemnification and insurance of directors and officers During the financial year the Group has not paid premiums in respect of insuring directors and officers of the Group against liabilities incurred as directors or officers. The Group has no insurance policy in place that indemnifies the Group’s auditors. 15 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ Report Information on directors Daniel Smith; BA, MAICD, GIA (cert), RG146 Non-Executive Chairman Experience and expertise A Director since December 2018, Mr Smith is a member of the Australian Institute of Company Directors and the Governance Institute of Australia and has over 10 years’ primary and secondary capital markets expertise. As a director of corporate consulting firm Minerva Corporate, he has advised on, and been involved in, over a dozen IPOs, RTOs and capital raisings on both the ASX and NSX. His key focus is on corporate governance and compliance, commercial due diligence and transaction structuring, as well as ongoing investor and stakeholder engagement. Other current directorships Alien Metals Ltd Artemis Resources Limited Lachlan Start Limited Europa Metals Ltd Hipo Resources Limited Appointed 26 February 2019 Appointed 5 February 2019 Appointed 18 January 2018 Appointed 16 January 2018 Appointed 13 June 2018 Former directorships in the last 3 years Taruga Minerals (2014-2017), CoAssets Limited (2015-2018), PLC Financial Limited (2017-2018) Special responsibilities Chairman of the board Interests in shares and options at the date of this report 1,333,334 shares, and 1,333,334 options Nicholas Ong; MBA, BCom, GradDipAppFin, GradDipACG, MAICD, FCIS, FGIA Non-Executive Director Experience and expertise A Director since December 2018, Mr Ong was a Principal Adviser at the ASX and brings 15 years’ experience in IPO, listing rules compliance and corporate governance. He was an active member of the ASX JORC Group and has overseen the admission of over 100 companies to the official list of the ASX. Nicholas is a member of the Governance Institute of Australia and holds a Bachelor of Commerce and a Master of Business Administration from the University of Western Australia. Other current directorships Helios Energy Limited Arrow Minerals Limited Vonex Limited Black Star Petroleum Limited Appointed 4 August 2017 Appointed 15 June 2011 Appointed 14 June 2016 Appointed 31 July 2018 Former directorships in the last 3 years Excelsior Gold Limited, CoAssets Limited, Auroch Minerals Limited, Fraser Range Metals Group Limited, Tianmei Beverage Group Corporation Limited, Bojun Agriculture Holdings Limited and Jiajiafu Modern Agriculture Limited. Special responsibilities Company Secretary Interests in shares and options at the date of this report 1,333,334 shares, and 1,333,334 options Ed Mead; BSc, MAIMM Non-Executive Director Experience and expertise A Director since June 2019, Mr Mead is a geologist with over 20 years’ experience in gold and base metals exploration, mine development and mine production. Ed has also worked in the oil and gas industry on offshore drilling platforms. Other commodities that he has significant experience with and can be considered to be a competent person in are iron ore, magnetite, coal, manganese, lithium, potash and uranium. Other current directorships Artemis Resources Limited 31 December 2014 Former directorships in the last 3 years None Special responsibilities Geology Interests in shares and options at the date of this report None 16 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ Report Michael Langoulant; B Com, CA resigned 29 November 2018 Experience and expertise Mr. Langoulant has approximately 30 years’ experience in public company corporate administration and fundraising. After 10 years with large international accounting firms he has acted as finance director, CFO, company secretary and non-executive director with a number of publicly listed companies. Todd Jeffrey Hibberd; BSc, MSc, Dip Bus, MAusIMM, MAICD resigned 19 June 2019 Experience and expertise Mr. Hibberd is a geologist with an extensive background in exploration, mining and mineral economics with over 24 years in exploration, resource estimation, feasibility studies, mine development and production management. Recent experience includes nine years as a Director of White Cliff Minerals (seven years as Managing Director), two years as Managing Director of ASX listed Stonehenge Metals Limited and 10 years working for Newmont Mining Corporation in various senior exploration and production roles. Rodd Boland; B Com, MBA resigned 23 December 2018 Experience and expertise Mr. Boland has over 20 years of corporate and financial industry experience in investment banking, executive management and the capital markets including advising and raising equity for corporations in the form of venture capital, private equity, pre-initial public offerings and initial public offerings. Jack Gardner; B Eng, MBA appointed 26 October 2018; resigned 14 December 2018 Experience and expertise Mr. Gardner is an engineer with extensive experience bringing mines into production. Mr. Gardner graduated from the University of Melbourne in 1962 with a Bachelor of Engineering (Mechanical) degree and is a Fellow of the Institution of Engineers Australia. He also holds a Master of Business Administration degree from Curtin University, Western Australia. 17 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ Report Meetings of directors During the financial year there were 5 formal directors’ meetings. All other matters that required formal Board resolutions were dealt with via written circular resolutions. In addition, the directors met on an informal basis at regular intervals during the financial year to discuss the Group’s affairs. The number of meetings of the Company’s board of directors attended by each director were: D Smith N Ong E Mead J Gardner M Langoulant T Hibberd R Boland Shares under option Directors’ meetings held whilst in office 1 1 0 0 4 5 5 Directors’ meetings attended 1 1 0 0 4 5 5 Outstanding share options at the date of this report are as follows: Grant Date 15 November 2018 11 February 2019 October 2017 October 2017 Date of expiry 30 September 2020 28 February 2024 31 July 2020 31July 2020 Exercise price $0.045 $0.015 $0.25 $0.50 Number of options 155,483,480 290,368,588 5,000,000 5,000,000 No option holder has any right under the options to participate in any other share issue of the Company or any other controlled entity. Shares issued on the exercise of options During the year, 3,000 shares (post-consolidation) were issued upon the exercise of options at $0.015. Options expired During the year, the following options expired unexercised: Amount 600,000 3,026,403 10,270,754 Options $0.60 options on 1 December 2018 $0.65 options on 31 December 2018 $0.50 options on 30 June 2019 18 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ Report Remuneration Report (Audited) This report outlines the remuneration arrangements in place for the key management personnel of White Cliff Minerals Limited (the “Company”) for the financial year ended 30 June 2019. The information provided in this remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001. The remuneration report details the remuneration arrangements for key management personnel (“KMP”) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any director (whether executive or otherwise) of the parent company, and includes all executives in the Parent and the Group receiving the highest remuneration. Key Management Personnel (i) Directors D Smith (appointed 14 December 2018) N Ong (appointed 14 December 2018) E Mead (appointed 19 June 2019) J Gardner (appointed 26 October 2018; resigned 14 December 2018) Michael Langoulant (resigned 29 November 2018) Todd Hibberd (resigned 19 June 2019) Rodd Boland (resigned 23 December 2018) (ii) Executives There were no other executives of the Company as at 30 June 2019. Details of directors’ and executives’ remuneration are set out under the following main headings: A B C D Principles used to determine the nature and amount of remuneration Details of remuneration Employment contracts/Consultancy agreements Share-based compensation Principles used to determine the nature and amount of remuneration A The objective of the Company’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aims to align executive reward with the creation of value for shareholders. The key criteria for good remuneration governance practices adopted by the Board are: • • • • • competitiveness and reasonableness acceptability to shareholders performance incentives transparency capital management The framework provides a mix of fixed salary, consultancy agreement based remuneration and share based incentives. The broad remuneration policy for determining the nature and amount of emoluments of Board members and senior executives of the Company is governed by the full board. Although there is no separate remuneration committee the Board’s aim is to ensure the remuneration packages properly reflect directors’ and executives’ duties and responsibilities. The Board assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention and motivation of a high quality Board and executive team. 19 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ Report The current remuneration policy adopted is that no element of any director or executive package is directly related to the Group’s financial performance. Indeed, there are no elements of any director or executive remuneration that are dependent upon the satisfaction of any specific condition however the overall remuneration policy framework is structured to advance and create shareholder wealth. Non-executive directors Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the directors. Non-executive directors’ fees and payments are reviewed annually by the Board and are intended to be in line with the market. Directors’ fees Some of the directors perform at least some executive or consultancy services. As the Board considers it important to distinguish between the executive and non-executive roles each of the directors receive a separate fixed fee for their services as a director. Retirement allowances for directors Apart from superannuation payments paid on salaries there are no retirement allowances for directors. Executive pay The executive pay and reward framework has the following components: • • base pay and benefits such as superannuation long-term incentives through participation in employee equity issues Base pay All executives are either full time employees or consultants who are paid on an agreed basis that has been formalised in a consultancy agreement. Benefits Apart from superannuation paid on executive salaries there are no additional benefits paid to executives. Short-term incentives There are no current short term incentive remuneration arrangements. Performance based remuneration To ensure that the Company has appropriate mechanisms in place to continue to attract and retain the services of suitable directors and employees, the Company has issued options and performance rights to key personnel. During the year ended 30 June 2019, all pre-existing performance rights issued to directors were cancelled for no consideration in conjunction with a share consolidation. B Details of remuneration Amounts of remuneration Details of the remuneration of the directors and other key management personnel (as defined in AASB 124 Related Party Disclosures) of the Company and the Group for the year ended 30 June 2019 are set out in the following tables. There are no elements of remuneration that are directly related to performance. The key management personnel of the Group comprise the directors of the Company who have the authority and responsibility for planning, directing and controlling the activities of the Group. Given the size and nature of the Group, there are no other employees who are required to have their remuneration disclosed in accordance with the Corporations Act 2001. 20 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ Report Remuneration of directors Year ended 30 June 2019 Name Director M Langoulant2 (resigned 29 November 2018) T Hibberd (resigned 19 June 2019) R Boland (resigned 23 December 2018) J Gardner (appointed 26 October 2018, resigned 14 December 2018) Daniel Smith (appointed 14 December 2018) Nicholas Ong (appointed 14 December 2018) Ed Mead (appointed 19 June 2019) Year ended 30 June 2018 Director M Langoulant2 T Hibberd R Boland Salary / fees Post- employment benefits Superannuation $ Share- based payments1 $ Total $ Performance based remuneratio n % $ 115,086 346,887 18,750 4,110 16,371 16,371 - - 16,342 - - - - - - - - - - - - 115,086 363,229 18,750 4,110 16,371 16,371 - - - - - - - - 515,575 16,342 - 533,917 180,000 259,356 30,000 - 21,789 - 20,000 20,000 - 200,000 301,145 30,000 10% 6.6% - 469,356 21,789 40,000 531,145 1 The assessed fair value at grant date of performance rights (2018) granted to directors is included in key management personnel remuneration above and expensed in the statement of comprehensive income over the vesting period of the options. Fair values at grant date are determined using the market price of the Company’s shares at the date of grant for performance rights. 2 Includes fees for accounting and corporate administration services paid to Lanza Holdings Pty Ltd, a company of which Mr Langoulant is a director and shareholder, in accordance with a consultancy agreement which may be terminated by the Company by paying 9 months of consultancy fees, or by Lanza Holdings Pty Ltd due to breach or upon 3 months’ notice. C Employment contracts/Consultancy agreements On appointment to the Board, all Non-Executive Directors enter into a service agreement with the Company in the form of a letter of appointment. Formal services contracts are made with the Chairman and the Managing Director. The Company may terminate these contracts on 3 months’ notice by paying 9 months fees. 21 White Cliff Minerals Limited ABN 22 126 299 125 Share-based compensation D The terms and conditions of options and performance rights granted affecting remuneration in the current or a future reporting period are as follows: Performance rights - shown on a pre-share consolidation basis Performance rights carry no dividend or voting rights. When vested, each right is convertible into one ordinary share. Performance rights issued to key management personnel as part of their remuneration are as follows: 30 June 2019 Name Director M Langoulant T Hibberd R Boland Opening balance Issued during the year1 Exercised during the year Cancelled during the year Closing balance1 86,500,000 86,500,000 8,250,000 - - - - - - (86,500,000) (86,500,000) (8,250,000) - - - 30 June 2018 Opening balance Issued during the year1 Exercised during the year Cancelled during the year Closing balance1 Name Director M Langoulant 11,000,000 82,500,000 (7,000,000) T Hibberd R Boland 11,000,000 82,500,000 (7,000,000) 1,500,000 8,250,000 (1,500,000) - - - 86,500,000 86,500,000 8,250,000 1 During the current year, all performance rights were cancelled for no consideration. The value ascribed to these performance rights was based on the Company’s share price on the date of grant, 25 October 2017 ($0.007), however no value has been expensed or included as remuneration in the past. 8,000,000 2015 performance rights (Tranche A) which were granted to Mr Langoulant (4,000,000) and Mr Hibberd (4,000,000) on 30 November 2015 and included in the opening balances above, vested during 2018. As a result, the value of these rights, being $40,000 ($0.005 per right) had been expensed during the 2018 year and included in the KMP remuneration above. 22 White Cliff Minerals Limited ABN 22 126 299 125 Key management personnel equity holdings Balance at beginning of year Balance at Appointment Additions Pre-consolidation Consolidation Adjustment Net Movement during the year post-consolidation Balance at Resignation Balance at the end of year 15,832,500 (88,752,059) 3,622,532 5,433,798 2019 Director Ordinary shares M Langoulant (resigned 29 November 2018) T Hibberd (resigned 19 June 2019) R Boland (resigned 23 December 2018) J Gardner (appointed 26 October 2018, resigned 14 December 2018) Daniel Smith (appointed 14 December 2018) Nicholas Ong (appointed 14 December 2018) Edward Mead (appointed 19 June 2019) Options M Langoulant (resigned 29 November 2018) T Hibberd (resigned 19 June 2019) R Boland (resigned 23 December 2018) J Gardner (appointed 26 October 2018, resigned 14 December 2018) Daniel Smith (appointed 14 December 2018) Nicholas Ong (appointed 14 December 2018) Edward Mead (appointed 19 June 2019) 75,180,825 76,000,000 11,921,667 - - - - 16,491,989 8,000,000 698,334 - - - 2,229,000 666,667 666,667 - - - - - - - - 20,000 666,667 666,667 - - - - - - - - - - - - - - (74,480,000) 3,040,000 4,560,000 (11,745,834) 340,000 515,833 - - - - 5,000,000 7,229,000 666,667 666,667 - - - - (16,162,150) 3,622,532 3,952,371 (8,000,000) 3,040,000 3,040,000 (684,368) 340,000 353,966 - - - - 1,333,334 1,333,334 - - - - - - - - - 5,000,000 5,020,000 666,667 666,667 - - - - 1,333,334 1,333,334 - 23 White Cliff Minerals Limited ABN 22 126 299 125 Balance at beginning of year Net Movement during the year Balance at the end of year 34,651,446 41,001,200 6,260,000 11,833,333 13,000,000 666,667 40,529,379 34,998,800 5,667,667 4,658,656 (5,000,000) 31,667 75,180,825 76,000,000 11,921,667 16,491,989 8,000,000 698,334 2018 Director Ordinary shares M Langoulant T Hibberd R Boland Options M Langoulant T Hibberd R Boland End of remuneration report. Auditor independence and non-audit services Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the directors of the Company with an Independence Declaration in relation to the audit of the financial report. This Independence Declaration is set out on page 25 and forms part of this directors’ report for the year ended 30 June 2019. Non-audit services The Company may decide to employ the auditors on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Company and/or the consolidated entity are important. The Company has considered the position and is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. Details of non-audit services are outlined in Note 22. Proceedings on behalf of Company No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings. No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001. This report is made in accordance with a resolution of the directors. Dan Smith Director Perth, Western Australia Date: 27 September 2019 24 AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the consolidated financial report of White Cliff Minerals Limited for the year ended 30 June 2019, I declare that to the best of my knowledge and belief, there have been no contraventions of: a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) any applicable code of professional conduct in relation to the audit. Perth, Western Australia 27 September 2019 L Di Giallonardo Partner 25 White Cliff Minerals Limited ABN 22 126 299 125 Statement of Comprehensive Income For the year ended 30 June 2019 Revenue from continuing operations Exploration acquisition costs written off Exploration expenditure incurred Borrowing costs Share based payment expense Other expenses Note 2(a) 2(b) Consolidated 2019 $ 6,023 - 186,387 33,616 - 996,618 2018 $ 1,949 20,000 965,902 - 40,000 1,805,475 1,216,621 2,831,377 Loss before income tax expense (1,210,598) (2,829,428) Income tax benefit Loss from continuing operations Net Loss after tax from discontinued operations Net loss for the year Other comprehensive income, net of tax Total comprehensive loss for the year Basic loss per share (cents per share) Loss from continuing operations (cents per share) 3 8 4 4 - - (1,210,598) (865,366) (2,829,428) (2,450,812) (2,075,964) (5,280,240) - - (2,075,964) (5,280,240) (0.2) (0.1) (0.2) (0.1) The above statement of comprehensive income should be read in conjunction with the accompanying notes. 26 White Cliff Minerals Limited ABN 22 126 299 125 Statement of Financial Position As at 30 June 2019 Current Assets Cash and cash equivalents Trade and other receivables Prepayments Other assets Assets held for sale Total Current Assets Non-Current Assets Plant and equipment Exploration project acquisition costs Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Provisions Borrowings Total Current Liabilities Total Liabilities Net Assets Equity Issued capital Reserves Accumulated losses Total Equity Note Consolidated 2019 $ 2018 $ 6 7 8 8 9 10 11 369,311 14,195 8,905 - 1,384,417 447,043 104,891 - 28,758 - 1,776,828 580,692 45,538 124,986 67,968 1,489,350 170,524 1,557,318 1,947,352 2,138,010 124,607 16,978 - 679,541 91,473 600,000 141,585 1,371,014 141,585 1,371,014 1,805,767 766,996 12 13 32,736,433 562,703 (31,493,369) 29,771,795 412,606 (29,417,405) 1,805,767 766,996 The above statement of financial position should be read in conjunction with the accompanying notes. 27 White Cliff Minerals Limited ABN 22 126 299 125 Statement of Changes in Equity For the year ended 30 June 2019 Consolidated Issued capital $ Accumulated losses $ Reserves Total equity $ $ Balance at 30 June 2017 25,733,309 (24,852,968) 914,399 1,794,740 Loss for the period Other comprehensive income Total comprehensive loss for the year Shares issued during the period Exercise of options Capital raising costs - note 12(b) (cash) Share-based payments: directors capital raising costs - - Transfers within equity - - - (5,280,240) - (5,280,240) 4,419,089 16,667 (223,260) - (255,215) 81,205 - - - - - 715,803 40,000 255,215 (797,008) - - - - - - (5,280,240) - (5,280,240) 4,419,089 16,667 (223,260) 40,000 - - Balance at 30 June 2018 29,771,795 (29,417,405) 412,606 766,996 Loss for the period Other comprehensive income Total comprehensive loss for the year Shares issued during the period Exercise of options Share-based payments: - capital raising costs Capital raising costs (cash) - - - (2,075,964) - (2,075,964) 3,356,848 45 (150,097) (242,158) - - - - - - - - - (2,075,964) - (2,075,964) 3,356,848 45 150,097 - - (242,158) Balance at 30 June 2019 32,736,433 (31,493,369) 562,703 1,805,767 The above statement of changes in equity should be read in conjunction with the accompanying notes. 28 White Cliff Minerals Limited ABN 22 126 299 125 Statement of Cash Flows For the year ended 30 June 2019 Cash flows from operating activities Receipts from customers, government grants and incentives Payments to suppliers and employees Interest paid Interest received Consolidated Inflows/ (Outflows) 2019 $ Inflows/ (Outflows) 2018 $ Note 32,402 (906,486) (35,184) 797 - (1,268,221) (89,583) 1,949 Net cash outflow from operating activities 15(a) (908,471) (1,355,855) Cash flows from investing activities Payments for exploration and evaluation Net cash outflow from investing activities Cash flows from financing activities Proceeds from the issue of shares Proceeds from borrowings Repayment of borrowings Payments for capital raising costs Net cash inflow from financing activities Net decrease in cash held (1,548,374) (3,416,714) (1,548,374) (3,416,714) 3,021,271 - (400,000) (242,158) 4,435,757 600,000 (100,000) (223,261) 2,379,113 4,712,496 (77,732) (60,073) Cash at the beginning of the year 447,043 507,116 Cash at the end of the year 6 369,311 447,043 The above statement of cash flows should be read in conjunction with the accompanying notes. 29 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 1: Statement of significant accounting policies (a) Basis of preparation The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standards and Interpretations and complies with other requirements of the law. The financial statements comprise the consolidated financial statements for the Group. For the purposes of preparing the consolidated financial statements, the Group is a for-profit entity. The accounting policies detailed below have been consistently applied to all of the years presented unless otherwise stated. The financial report has also been prepared on a historical cost basis. The Company is a listed public company registered and domiciled in Australia. The financial report is presented in Australian dollars. Going Concern The Company and its controlled entities as at 30 June (the “Group”) do not generate sufficient cash flows from their operating activities to finance these activities. Thus the continuing viability of the Group and its ability to continue as a going concern and meet its debts and commitments as they fall due are dependent upon the Group being successful in completing a capital raising and/or asset sale/joint venture agreement in the next 12 months. The directors have mitigated this risk by reducing the Group’s corporate overheads and postponing expenditure on the Group’s projects where possible. The Group expects shareholders to approve the sale of the Group’s interest in the Accu project at the general meeting to be held on 15 October 2019. Cash proceeds of US$2.15 million are expected from this sale. If the sale is not approved and the proceeds not received the Group’s cash flows indicate that further capital raisings will be required. The directors remain of the view that they will be able to raise sufficient equity/debt to continue its normal operations; however there is no certainty that this will occur. As a result, there exists a material uncertainty that may cast significant doubt on whether the Group will continue as a going concern and, therefore, whether it will realise its assets and settle its liabilities and commitments in the normal course of business and at the amounts stated in the financial report. However, the directors believe that the Group will be successful in the above matters and, accordingly, have prepared the financial report on a going concern basis. (b) Adoption of new and revised standards Changes in accounting policies on initial application of Accounting Standards In the year ended 30 June 2019, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Group’s operations and effective for the current annual reporting period. It has been determined by the Directors that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the Group and, therefore, no change is necessary to Group accounting policies. The Group has however adopted “AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101” (certain specific disclosures required by Australian Accounting Standards have not been made on the basis that the information resulting from that disclosure is not material). The Directors have also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the year ended 30 June 2019, specifically AASB 16 Leases. As a result of this review the Directors have determined that there is no material impact of the new and revised Standards and Interpretations on the Group and, therefore, no change necessary to Group accounting policies. (c) Statement of compliance The financial report was authorised by the Board of directors for issue on 27 September 2019. The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS). 30 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 1: Statement of significant accounting policies (continued) (d) (e) (f) (g) Basis of consolidation The consolidated financial statements comprise the financial statements of White Cliff Minerals Limited (“Company” or “parent entity”) and its controlled entities as at 30 June 2019 (the “Group”). The financial statements of the controlled entities are prepared for the same reporting period as the parent entity, using consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full. Controlled entities are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Control exists where the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Significant accounting judgements estimates and assumptions The application of accounting policies requires the use of judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the period in which the estimate is revised if it affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Exploration and evaluation costs carried forward The Group’s main activity is exploration and evaluation for minerals. The nature of exploration activities are such that it requires interpretation of complex and difficult geological models in order to make an assessment of the size, shape, depth and quality of resources and their anticipated recoveries. The economic, geological and technical factors used to estimate mining viability may change from period to period. In addition, exploration activities by their nature are inherently uncertain. Changes in all these factors can impact exploration asset carrying values. Revenue recognition Revenue is recognised to the extent that control has passed and it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: (i) Interest income Interest revenue is recognised on a time proportionate basis that take into account the effective yield on the financial asset. (ii) Government assistance - drilling grants Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs they are compensating. Cash and cash equivalents Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Temporary bank overdrafts are included in cash at bank and in hand. Permanent bank overdrafts are shown within borrowings in current liabilities in the statement of financial position. For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. 31 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 1: Statement of significant accounting policies (continued) (h) Income tax The income tax expense or benefit for the year is the tax payable on the current year’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary difference and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Group’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance date. Deferred income tax liabilities are recognised for all taxable temporary differences except: • • when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or when the taxable temporary difference is associated with investments in controlled entities, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except: • • when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or when the deductible temporary difference is associated with investments in controlled entities, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised. The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the financial year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. Tax consolidation legislation The Company and its 100% owned Australian resident subsidiaries have implemented the tax consolidation legislation. Current and deferred tax amounts are accounted for in each individual entity as if each entity continued to act as a taxpayer on its own. The Group recognises both its current and deferred tax amounts and those current tax liabilities, current tax assets and deferred tax assets arising from unused tax credits and unused tax losses which it has assumed from its controlled entities within the tax consolidated group. 32 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 1: Statement of significant accounting policies (continued) (i) Other taxes Revenues, expenses and assets are recognised net of the amount of GST except: (j) • • when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and receivables and payables, which are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position. Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. Impairment of assets The Group assesses at each balance date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset's value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at re-valued amount (in which case the impairment loss is treated as a revaluation decrease). An assessment is also made at each balance date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior financial periods. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. (k) Trade and other payables Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and other payables are presented as current liabilities unless payment is not due within 12 months. 33 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 1: Statement of significant accounting policies (continued) (l) (m) Provisions Where applicable, provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not made for future operating losses. When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement. Provisions are measured at the net present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting year. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost. Share-based payment transactions Equity settled transactions: The Group provides benefits to employees and consultants of the Group in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity- settled transactions). The cost of these equity-settled transactions with employees and consultants is measured by reference to the fair value of the equity instruments at the date at which they are granted and/or vested. The fair value is determined by using either market value or the Black and Scholes model, further details of which are given in Note14. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which any performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects the extent to which the vesting period has expired, and the Group’s best estimate of the number of equity instruments that will ultimately vest. The statement of comprehensive income charge or credit for a year represents the movement in cumulative expense recognised as at the beginning and end of that year. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition. If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification. If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph. The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share. (n) Issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a new business are not included in the costs of acquisition as part of purchase consideration. 34 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 1: Statement of significant accounting policies (continued) (o) (p) Earnings per share Basic earnings per share is calculated as net profit or loss attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares. Diluted earnings per share is calculated as net profit or loss attributable to members of the parent, adjusted for: • • • costs of servicing equity (other than dividends) and preference share dividends; the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares, divided by the weighted average number of ordinary shares and dilutive potential ordinary shares. Exploration and evaluation expenditure Exploration costs are expensed as incurred. Acquisition costs are accumulated in respect of each separate area of interest. Acquisition costs are carried forward where right of tenure of the area of interest is current and they are expected to be recouped through the sale or successful development and exploitation of the area of interest or, where exploration and evaluation activities in the area of interest have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. When an area of interest is abandoned or the Directors decide that it is not commercial, any accumulated acquisition costs in respect of that area are written off in the financial year and accumulated acquisition costs written off to the extent that they will not be recovered in the future. Amortisation is not charged on acquisition costs carried forward in respect of areas of interest in the development phase until production commences. Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years. Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development. (q) Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of White Cliff Minerals Limited. (r) Parent entity financial statements The financial information for the parent entity, White Cliff Minerals Limited, disclosed in Note 21, has been prepared on the same basis as the consolidated financial statements. 35 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 1: Statement of significant accounting policies (continued) (s) (t) Financial instruments AASB 9 Financial Instruments replaces AASB 139 Financial Instruments: Recognition and Measurement. It makes major changes to the previous guidance on the classification and measurement of financial assets and introduces an ‘expected credit loss’ model for impairment of financial assets. The investment classifications available-for-sale financial assets and Held-to-maturity investment' are no longer used and Financial assets at fair value through other comprehensive income (FVOCI) was introduced. There were no investments held in these categories as at 30 June 2019. Interest revenue is no longer included in the Revenue note and is now shown separately on the face of the statement of comprehensive income. When adopting AASB 9, the Group has applied transitional relief and opted not to restate prior periods. AASB 9 also contains new requirements on the application of hedge accounting. The new hedge accounting looks to the align hedge accounting with entities’ risk management activities look to align hedge accounting more closely with entities’ risk management activities by increasing the eligibility of both hedged items and hedging instruments and introducing a more principles-based approach to assessing hedge effectiveness. Assets and liabilities held for sale Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales for such asset (or disposal groups) and the sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a complete sale within one year from the date of classification. When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Group will retain a non-controlling interest in it former subsidiary, after the sale. When the Group is committed to a sale plan involving disposal of an investment, or a portion of an investment, in an associate or joint venture, the investment or the portion of the investment that will be disposed of is classified as held for sale when the criteria described above are met, and the Group discontinues the use of the equity method in relation to the portion that is classified as held for sale. Any retained portion of an investment in an associate or joint venture that has not been classified as held for sale continues to be accounted for using the equity method. The Group discontinues the use of the equity method at the time of disposal when the disposal results in the Group losing significant influence over the associate or joint venture. After the disposal takes place, the Group accounts for any retained interest in the associate or joint venture in accordance with AASB 139 unless the retained interest continues to be an associate or a joint venture, in which case the Group uses the equity method. 36 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 2: Revenue and expenses (a) Revenue from continuing operations Interest received Sundry income (b) Expenses Loss from ordinary activities before income tax benefit includes the following specific expenses (included in other expenses): Auditor’s remuneration (Note 22) Borrowing costs Depreciation Employee costs* Interest expense Leave provisions * Includes all direct exploration employee costs Consolidated 2019 $ 2018 $ 797 5,226 6,023 1,949 - 1,949 27,954 33,616 22,429 404,774 1,814 (54,411) 26,250 17,727 63,079 662,802 89,583 99,389 Note 3: Income tax The prima facie income tax benefit on pre-tax accounting loss reconciles with the income tax benefit in the financial statements as follows: Accounting profit / (loss) before tax from continuing operations (2,075,966) (5,280,240) Income tax expense / (benefit) calculated at 30% (2018: 27.5%) Non-deductible expenses Other deferred tax assets and tax liabilities not recognised Adjustments in respect of deferred income tax of previous years Junior Minerals Exploration Incentive (JMEI) Income tax expense/(benefit) reported in the income statement (a) Unrecognised deferred tax balances The following deferred tax assets and liabilities have not been brought to account: Deferred tax assets comprise: Losses available for offset against future income – revenue Losses available for offset against future income – capital Share issue costs Accrued expenses and liabilities Deferred tax liabilities comprise: Foreign exchange Exploration expenditure capitalised (Australian) (622,790) 263,397 326,189 (26,530) 59,734 - (1,452,066) 16,297 1,435,769 - - - 5,083,037 38,159 114,162 13,148 5,248,506 4,697,252 38,159 128,192 13,693 4,877,296 8 31,480 31,488 - 31,480 31,480 37 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 3: Income tax (cont) Deferred tax assets have not been recognised in respect of these items because it is not considered probable that future taxable profit will be available against which the Group can utilise the benefit thereof. (b) Income tax expense not recognised directly in equity during the year: Share issue costs Note 4: Loss per share Total basic loss per share (cents) Loss from continuing operations (cents) The loss and weighted average number of ordinary shares used in the calculation of basic loss per share is as follows: Net loss for the period Net loss from continuing operations The weighted average number of ordinary shares Consolidated 2019 $ 2018 $ 45,029 45,029 98,930 98,930 (0.2) (0.1) (0.2) (0.1) (2,075,964) (5,280,240) (1,210,597) (2,829,428) 947,080,344 2,881,791,622 The diluted loss per share is not reflected as the result is anti-dilutive. Note 5: Segment information For management purposes, the Board of Directors of the Company has been defined as the Chief Operating Decision Maker. Segment information is presented in respect of the Group’s business segments based on the Group’s management and internal reporting structure. During the year the Group operated predominantly in one business segment that consisted of mineral exploration. Geographically, the Group explores in both Australia and the Kyrgyz Republic. Segment results are classified in accordance with their use within geographic segments. Segment results and assets include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The following table presents the financial information regarding these segments provided to the Board of Directors for the year ended 30 June 2019. 38 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 5: Segment information (cont) 2019 Revenue Interest income Segment revenue Australia $ 797 5,226 6,023 Kyrgyz1 $ - - - Total $ 797 5,226 6,023 Segment net operating loss after tax (1,210,597) (865,367) (2,075,964) Segment assets Other segment information Segment liabilities Depreciation and amortisation of segment assets 562,935 1,384,417 1,947,352 141,585 19,659 - 2,770 141,585 22,429 1 The Kyrgyz segment comprises the Accu Copper-Gold project in Kyrgyzstan which has been classified as a disposal group at balance date (see Note 8). 2018 Revenue Interest income Segment revenue Australia $ 1,949 1,949 Kyrgyz $ - - Total $ 1,949 1,949 Segment net operating loss after tax (2,829,428) (2,450,812) (5,280,240) Segment assets Other segment information Segment liabilities Depreciation and amortisation of segment assets 736,800 1,401,210 2,138,010 1,356,014 31,411 15,000 31,668 1,371,014 63,079 Note 6: Cash and cash equivalents Cash at bank Short term deposits Consolidated 2019 $ 2018 $ 369,311 - 50,632 396,411 369,311 447,043 (a) Reconciliation to Statement of Cash Flows The above figures agree to cash at the end of the financial year as shown in the Statement of Cash Flows. (b) Cash at bank and on hand Cash at bank earns interest at floating rates based on daily bank deposit rates. 39 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 7: Trade and other receivables Goods and services tax receivable Note 8: Exploration project acquisition costs Opening balance Acquisition costs written off Project acquisition costs Transfer to assets held for sale Acquisition costs in respect of areas of interest in the exploration phase Consolidated 2019 $ 14,195 2018 $ 104,891 14,195 104,891 Consolidated 2019 $ 2018 $ 1,489,350 - 20,053 (1,384,417) 1,509,350 (20,000) - - 124,986 1,489,350 (i) (i) During the year the Company engaged consultants to seek a potential sale of its 90% interest in Aucu-Copper- Gold project in Kyrgyzstan. The capitalised acquisition costs have been recognised as assets held for sale, as the project is considered to constitute a disposal group. Subsequent to year end, on 6 September 2019 the Group announced the Sale of its 90% interest to RTG Mining Inc. for US$2.65m. The loss from this discontinued operation of $865,366 (2018: $2,450,812) represents exploration expenditure incurred, and expensed in accordance with the Group’s accounting policy. The recoupment of the exploration project acquisition costs carried forward is dependent upon the recoupment of costs through successful development and commercial exploitation, or alternatively by sale of the respective areas. Note 9: Trade and other payables Trade payables and accruals* Accrued annual leave 115,760 8,847 124,607 604,377 75,164 679,541 * Trade payables are non-interest bearing and are normally paid on 30 day terms. Note 10: Provisions Provision for long service leave 16,978 91,473 40 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 11: Borrowings Short term loan from shareholder Consolidated 2019 $ - - 2018 $ 600,000 600,000 During the financial year, the Group repaid all outstanding loans. As at 30 June 2019, the Group does not have any outstanding borrowings. Movements during the year: Opening balance Loans received Loans repaid Note 12: Issued capital (a) Ordinary shares issued 470,349,882 (2018: 3,849,586,836) ordinary shares 600,000 - (600,000) 100,000 600,000 (100,000) - 600,000 Consolidated $ 2019 $ 2018 32,736,433 29,771,795 Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders’ meetings. In the event of winding up of the parent entity, ordinary shareholders rank after all creditors and are fully entitled to any proceeds on liquidation. Date 1 July 2018 Sept -Nov 2017 Jan-Feb 2018 Mar 2018 Mar 2018 June 2018 Capital raising costs Capital raising costs 30 June 2018 6 September 2018 15 November 2018 15 November 2018 13 March 2019 28 May 2019 Capital raising costs Capital raising costs Details Rights issue Placement Rights issue Performance shares issued Options exercised Cash Share-based payments Consolidation 50:1 Rights Issue Repayment of short term loan Placement Exercise of Options Cash Share-based payments Number of shares 1,879,477,724 939,738,862 500,000,000 513,203,583 15,500,000 1,666,667 - - 3,849,586,836 (3,772,595,022) 140,650,147 13,333,333 239,371,588 3,000 - - Issue Price $ 0.002 0.002 0.003 - 0.01 0.015 0.015 0.005 0.015 $ 25,733,309 1,879,478 1,000,000 1,539,611 81,205 16,667 (223,260) (255,215) 29,771,795 - 2,097,376 200,000 1,059,472 45 (242,158) (150,097) 30 June 2019 470,349,882 32,736,433 41 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 12: Issued capital (cont) (c) Share options Listed options exercisable at $0.015 on or before 28 February 2024 Listed options exercisable at $0.045 on or before 30 September 2020 Listed options exercisable at $0.60 on or before 1 December 2018 Listed options exercisable at $0.65 on or before 31 December 2018 Listed options exercisable at $0.50 on or before 30 June 2019 Gleneagle options Series A Gleneagle options Series B 1 Adjusted for 50:1 consolidation. (d) Movements in share options Listed Options to acquire ordinary fully paid shares at $0.50 on or before 24 June 2019: Beginning of the financial year Issued during year Expired during year Balance at end of financial year Listed Options to acquire ordinary fully paid shares at $0.65 on or before 31 December 2018: Beginning of the financial year Issued during year Expired during the financial year Balance at end of financial year Unlisted Options to acquire ordinary fully paid shares at $0.60 on or before 1 December 2018: Beginning of the financial year Expired during year Balance at end of financial year Unlisted Gleneagle Series A Options to acquire ordinary fully paid shares at $0.25 on or before 31 July 2020: Beginning of the financial year Issued during year Balance at end of financial year Unlisted Gleneagle Series B Options to acquire ordinary fully paid shares at $0.25 on or before 31 July 2020: Beginning of the financial year Issued during year Balance at end of financial year Number of options 2019 20181 290,368,588 155,483,480 - - - 5,000,000 5,000,000 455,852,068 - - 600,000 3,026,444 10,270,754 5,000,000 5,000,000 23,897,198 Number of options 2019 2018 10,270,754 - (10,270,754) - 10,270,754 - - 10,270,754 3,026,445 - (3,026,445) - 3,026,445 - - 3,026,445 600,000 (600,000) 600,000 - - 600,000 5,000,000 - - 5,000,000 5,000,000 5,000,000 5,000,000 - - 5,000,000 5,000,000 5,000,000 42 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 12: Issued capital (cont) Listed Options to acquire ordinary fully paid shares at $0.045 on or before 30 September 2020: Beginning of the financial year Issued during year Balance at end of financial year Listed Options to acquire ordinary fully paid shares at $0.015 on or before 30 September 2020: Beginning of the financial year Issued during year Less: options exercised Balance at end of financial year Note 13: Reserves Option issue reserve (a) Share compensation reserve (b) Opening balance Share based expense for year Capital raising expense Transferred to equity Transferred to retained losses Closing balance - 155,483,480 155,483,480 - 290,371,588 (3,000) 290,368,588 - - - - - - Consolidated 2019 $ 125,391 287,215 - 150,097 - - 437,313 2018 $ 125,391 789,008 40,000 255,215 (81,205) (715,803) 287,215 562,703 412,606 (a) (b) Option issue reserve The option issue reserve represents amounts paid upon subscribing for options issued by the Company. Share compensation reserve The share compensation reserve is used to record the value of equity benefits provided to consultants and directors as part of their remuneration. Refer Note 14. Note 14: Share based payments Share based payments consists of options and performance rights issued to directors and consultants. The expense is recognised in the Statement of Comprehensive Income and Statement of Changes in Equity over the vesting periods of the options and rights. The following share-based payment arrangements were in place during the current year: Type Number Grant date Expiry Date Exercise price $ Fair value Pre-consolidation rights and options 2015 Rights Tranche B 8,000,000 30/11/2015 31/12/2018 - 40,0001 2016 Options 16,000,000 23/12/2016 31/12/2018 0.013 $32,0002 Gleneagle Series A Options 250,000,000 10/1/18 31/7/2020 0.005 $182,6253 43 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 14: Share based payments (cont) Type Number Grant date Expiry Date Exercise price $ Fair value Gleneagle Series B Options 250,000,000 10/1/18 31/7/2020 0.01 $70,5903 2017 Performance rights 173,500,000 25/10/2017 31/12/2020 - $542,0621 June 2019 Options 2,000,000 29/3/2018 30/6/2019 0.01 $2,0002 Post-consolidation rights and options 13/03/2019 51,000,000 September 2020 Options 1 No fair value is required to be expensed upon the grant of these performance rights as it was not considered probable that the vesting conditions of these rights would be met. 2 The fair value of the equity-settled listed options was estimated using the initial bid price for these options on the first day these options were quoted for trading upon ASX. 3 The Gleneagle unlisted options were granted in respect to Gleneagle’s underwriting of the 2017 Rights Issue. These options have been valued using a Black & Scholes option pricing model using the following inputs – spot price at date of issue $0.006; exercise prices - $0.005 - $0.01; interest rate 1.88%; volatility 100%; discount for lack of marketability 30%; and discount for vesting hurdles 50% - 60%. 4 The September 2020 options were granted in respect to underwriting of the 2019 Rights Issue. These options have been valued using a Black & Scholes option pricing model using the following inputs – spot price at date of issue $0.005; exercise prices - $0.015; interest rate 2%; volatility 100% 28/02/2024 $150,0984 0.015 Note 15: Reconciliation of loss after income tax to net cash outflow from operating activities a) Reconciliation of loss from ordinary activities after income tax to net cash outflow from operating activities Net loss for the year after income tax (2,075,964) (5,280,240) Consolidated 2019 $ 2018 $ Depreciation Share based payment expense Exploration expenditure treated as exploration investment activity Exploration acquisition costs written off (Increase) / decrease in trade and other receivables (Increase) / decrease in prepayments Increase / (decrease) in trade and other payables Increase / (decrease) in provisions 22,429 - 63,079 40,000 1,051,753 - 3,416,714 20,000 119,454 (8,905) 57,258 (74,496) (63,372) 15,300 333,275 99,389 Net cash outflow from operating activities (908,471) (1,355,855) Note 16: Commitments and contingencies Exploration expenditure commitments In order to maintain rights of tenure to its Australian located mineral tenements, the Group is required to outlay certain amounts in respect of rent and minimum expenditure requirements set by the Western Australian State Government Mines Department. The Group’s commitments to meet this minimum level of expenditure are approximately $556,174 (2018: $756,000) annually. 44 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 16: Commitments and contingencies (continued) Exemption from incurring this annual level of expenditure may be granted where access to the tenement area is restricted for reasons beyond the Group’s control such as where native title issues restrict the Group’s ability to explore in the project area. The Group is not aware of any such restrictions to exploration in the coming year and it does not anticipate seeking any exemption to reduce this annual expenditure requirement. In order to maintain rights of tenure to its Kyrgyz Republic located mineral tenement, the Group is required to complete an annual works program as agreed with the Kyrgyz government. If this program is not completed in the calendar year then continued tenure to the project could be in jeopardy. Note 17: Financial Risk Management Exposure to interest rate, liquidity, and credit risk arises in the normal course of the Group’s business. The Group does not hold or use derivative financial instruments. The Group’s principal financial instruments comprise mainly of deposits with banks. The totals for each category of financial instruments are as follows: Financial Assets Cash and cash equivalents Consolidated 2019 $ 2018 $ 369,311 447,043 The Group uses different methods as discussed below to manage risks that arise from these financial instruments. The objective is to support the delivery of the financial targets while protecting future financial security. (a) Capital risk management The Group’s capital comprises share capital and reserves less accumulated losses. As at 30 June 2019, the Group has net assets of $1,805,767 (2018: $766,996). The Group manages its capital to ensure its ability to continue as a going concern and to optimise returns to its shareholders. (b) Liquidity Risk Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilities. The Group manages liquidity risk by maintaining sufficient cash facilities to meet the operating requirements of the business and investing excess funds in highly liquid short-term investments. The responsibility for liquidity risk management rests with the Board of Directors. Alternatives for sourcing future capital needs include the cash position and future equity raising alternatives. These alternatives are evaluated to determine the optimal mix of capital resources for our capital needs. The Board expects that, assuming no material adverse change in a combination of our sources of liquidity, present levels of liquidity will be adequate to meet expected capital needs. Maturity analysis for financial liabilities Financial liabilities of the Group comprise trade and other payables. As at 30 June 2019 any financial liabilities that are contractually maturing within 60 days have been disclosed as current. Trade and other payables that have a deferred payment date of greater than 12 months have been disclosed as non-current. (c) Interest Rate Risk Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair value of financial instruments. The Group’s exposure to changes to interest rate risk relates primarily to its earnings on cash and term deposits. The Group manages the risk by investing in short term deposits. 45 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 17: Financial Risk Management (continued) Cash and cash equivalents Interest rate sensitivity 2019 $ 2018 $ 360,239 396,412 The following table demonstrates the sensitivity of the Group’s statement of comprehensive income to a reasonably possible change in interest rates, with all other variables constant. Change in Basis Points Effect on Post Tax Loss Effect on Equity including Increase 100 basis points Decrease 100 basis points ($) retained earnings ($) Increase/(Decrease) Increase/(Decrease) 2019 8 (8) 2018 (20) 20 2019 8 (8) 2018 20 (20) A sensitivity of 100 basis points has been used as this is considered reasonable given the current level of both short term and long-term Australian Dollar interest rates. This would represent two to four movements by the Reserve Bank of Australia. (d) Credit Risk Exposures Credit risk represents the risk that the counterparty to the financial instrument will fail to discharge an obligation and cause the Group to incur a financial loss. The Group’s maximum credit exposure is the carrying amounts on the statement of financial position. The Group holds financial instruments with credit worthy third parties. At 30 June 2019, the Group held cash at bank. These were held with financial institutions with a rating from Standard & Poors of AA or above (long term). The Group has no past due or impaired debtors as at 30 June 2019. (e) Fair Value Measurement There were no financial assets or liabilities at 30 June 2019 requiring fair value estimation and disclosure as they are either not carried at fair value or in the case for short term assets and liabilities, their carrying values approximate fair value. Note 18: Key management personnel disclosures (a) Directors At the date of this report the directors of the Company are: Daniel Smith – Non-Executive Chairman Nicholas Ong – Non-Executive Director Edward Mead – Non-Executive Director There were no changes of the key management personnel after the reporting date and the date the financial report was authorised for issue. 46 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 18: Key management personnel disclosures (continued) (b) Key management personnel During the reporting periods the Group had no other key management personnel. (c) Key management personnel compensation Short-term Post-employment Share-based payments Consolidated 2019 $ 2018 $ 517,575 16,342 - 533,917 469,356 21,789 40,000 531,145 Detailed remuneration disclosures of directors and key management personnel are included in the Remuneration Report forming part of the Directors’ Report. Note 19: Interest in jointly controlled operation The Group owns 90% of Chanach LLC which is the joint venture company that holds the Chanach gold-copper exploration tenement in Kyrgyz Republic. Apart from owning this mineral tenement Chanach LLC does not hold any other material assets. All known Chanach LLC liabilities are accrued as liabilities of the parent company. As a result, it is not considered necessary to consolidate Chanach LLC into the Group’s accounts as it will not show a position that is materially different. The Group has no capital commitments or guarantees in relation to funding Chanach LLC. Note 20: Related party disclosure The ultimate parent entity in the wholly-owned group and the ultimate Australian parent entity is White Cliff Minerals Limited. The consolidated financial statements include the financial statements of White Cliff Minerals Limited and the controlled entities listed in the following table, subject to the disclosures made in Note 18: Name of entity Country of incorporation Class of shares Equity holding Northern Drilling Pty Ltd Petrus Resources Pty Ltd Venture Exploration Pty Ltd PB Partners Malaysia Limited Australia Australia Australia Malaysia Chanach LLC Kyrgyz Republic Ordinary Ordinary Ordinary Ordinary Ordinary 2019 % 100 100 100 100 90 2018 % 100 100 100 100 90 There were no transactions between White Cliff Minerals Limited and its controlled entities during the financial year other than loan funds advanced to the Chanach LLC re the Chanach gold-copper project (2018: nil). During the year the Group paid $101,464 to Lanza Holdings Pty Ltd, an entity associated with Michael Langoulant, for services including accounting and corporate administration. This agreement was terminated by mutual consent on 28 January 2019. 47 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 20: Related party disclosure (continued) During the year the Group paid $45,307 to Minerva Corporate Pty Ltd an entity associated with directors Nicholas Ong and Daniel Smith for services including directors’ fees, company secretarial and accounting services. Note 21: Parent Entity Disclosures Financial position Assets Current assets Non-current assets Total assets Liabilities Current liabilities Borrowings Total liabilities Net assets Equity Issued capital Accumulated losses Reserves Total equity Financial performance Loss for the year Other comprehensive income Total comprehensive loss Note 22: Auditor’s remuneration The auditors of the Company are HLB Mann Judd. Assurance services: HLB Mann Judd: Audit and review of financial statements Total remuneration for audit services Other services 30 June 2019 $ 30 June 2018 $ 1,776,827 170,525 1,947,352 141,585 - 141,585 447,043 1,690,967 2,138,010 771,014 600,000 1,371,014 1,805,767 776,996 32,736,433 (31,493,369) 562,703 29,771,795 (29,417,405) 412,606 1,805,767 766,996 30 June 2019 $ 30 June 2018 $ (2,075,964) - (5,280,240) - (2,075,964) (5,280,240) Consolidated 2019 $ 27,954 27,954 - 2018 $ 26,250 26,250 - Total auditor’s remuneration 27,954 26,250 48 White Cliff Minerals Limited ABN 22 126 299 125 Notes to the financial statements For the year ended 30 June 2019 Note 23: Events after the balance date There has not been any matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial periods other than: • On 6 September 2019, the Company announced that it had executed a binding offer for the sale of the Company’s 90% interest in the Aucu Gold-Copper project in Kyrgyzstan, to RTG Mining Inc for US$2.65 million, consisting of US$2.15 million cash and US$500K of RTG shares (“RTG”). • On 11 September 2019, the Company despatched a notice of extraordinary general meeting to shareholders to approve the sale. 49 White Cliff Minerals Limited ABN 22 126 299 125 Directors’ Declaration 1. In the opinion of the directors of White Cliff Minerals Limited (the “Company”): a. the accompanying financial statements and notes are in accordance with the Corporations Act 2001 including: i. giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its performance for the financial year then ended; and ii. complying with Accounting Standards, Corporations Regulations 2001, professional reporting b. c. requirements and other mandatory requirements. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board. 2. This declaration has been made after receiving the declarations required to be made to the directors in accordance with Section 295A of the Corporations Act 2001 for the year ended 30 June 2019. This declaration is signed in accordance with a resolution of the Board of Directors. Daniel Smith Director Perth, Western Australia 27 September 2019 50  INDEPENDENT AUDITOR’S REPORT To the members of White Cliff Minerals Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of White Cliff Minerals Limited (“the Company”) and its controlled entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2019, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a) giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its financial performance for the year then ended; and b) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Material uncertainty related to going concern We draw attention to Note 1(a) in the financial report, which indicates that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. 51 Key Audit Matter How our audit addressed the key audit matter Carrying value of exploration project acquisition costs (Note 8 in the financial report) The Group has capitalised exploration project acquisition costs of $124,986 as at 30 June 2019 in relation to its Australian projects. Our audit procedures determined that the carrying value of exploration and evaluation was a key audit matter as it was an area which required the most audit effort, required the most communication with those charged with governance and was determined to be of key importance to the users of the financial statements. Assets Held for Sale (Note 8 in the financial report) The Group has capitalised exploration project acquisition costs of $1,384,417 as at 30 June 2019 in relation to its Kyrgyz Republic projects. This project was sold subsequent to year end and has been classified as an asset held for sale. Our audit procedures determined that the carrying value of assets held for sale was a key audit matter as it was an area which required the most audit effort, required the most communication with those charged with governance and was determined to be of key importance to the users of the financial statements. Our procedures included but were not limited to: review • We obtained an understanding of the key processes associated with the management’s carrying value of the capitalised exploration project acquisition costs; the Directors’ assessment of potential indicators of impairment; considered • We of • We obtained evidence the Group has current rights to tenure of its areas of interest; that • We examined the exploration budget for the year ending 30 June 2020 and discussed with management the nature of planned ongoing activities; to exploration expenditure during the year; and additions reviewed • We • We examined the disclosures made in the financial report. Our procedures included but were not limited to: • We reviewed to available information the classification as an asset held for sale was correct; all ensure • We reviewed the sale agreement - signed subsequent to year end - to ensure the asset’s recoverable value was greater than its recoverable value; and • We examined the disclosures made in the financial report. Information other than the financial report and auditor’s report thereon The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2019, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. 52 If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - - - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. - We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. 53 From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included within the directors’ report for the year ended 30 June 2019. In our opinion, the Remuneration Report of White Cliff Minerals Limited for the year ended 30 June 2019 complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards HLB Mann Judd Chartered Accountants Perth, Western Australia 27 September 2019 L Di Giallonardo Partner 54 White Cliff Minerals Limited ABN 22 126 299 125 Additional Shareholder Information Additional information required by the ASX Limited (“ASX”) Listing Rules and not disclosed elsewhere in this set out below. The shareholder information set out below was applicable as at 26 September 2019. A. Distribution of equity securities Analysis of numbers of equity security holders by size of holding: 1 − 5,000 5,001 − 10,000 10,001 − 100,000 100,001 and over Class of equity security Ordinary shares 1,050 332 692 317 2,391 There were 1,994 holders of less than a marketable parcel of ordinary shares. B. Equity security holders Twenty largest quoted equity security holders – ordinary shares 55 White Cliff Minerals Limited ABN 22 126 299 125 Additional Shareholder Information Twenty largest quoted equity security holders – 28 February 2024 options 56 White Cliff Minerals Limited ABN 22 126 299 125 Twenty largest quoted equity security holders – 30 September 2020 options Additional Shareholder Information C. Substantial shareholders D. Voting rights The voting rights attaching to each class of equity securities are set out below: Ordinary shares On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. Options No options have any voting rights. E. On-market buyback There is no current on-market buyback. 57 White Cliff Minerals Limited ABN 22 126 299 125 F. Tenement schedule Project Area Tenement details % Held Laverton EL39/1833 Mt Remarkable EL31/1101 Ghan Well E39/1479 Ironstone Range Lake Johnson EL38/2484; EL38/2552; EL38/2690; EL38/2693; EL38/2847-8; EL38/2877 EL63/1988-9; EL63/1222; EL63/1264; EL63/1716 EL63/1793; EL63/1861 Red Flag EL39/1585 100 100 100 100 100 100 58 

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